Continued: Minneapolis ad agency adjusts to life after Target

For more than a decade, Target's breakthrough media advertising was the brainchild of Peterson Milla Hooks (PMH), a low-key 50-person agency with offices in a converted auto dealership in downtown Minneapolis.

Under PMH's two decades of creative direction, the Target logo became a U.S. symbol of retail excellence, with work ranging from Petula Clark singing "A Sign of the Times" to the defining Target dog, Bullseye.

But the relationship ended ingloriously in early 2011 when Target gave PMH's duties to another of its agencies, Wieden & Kennedy, in a move to consolidate advertising responsibilities.

"We were fired," said PMH President Tom Nowack in an interview last week. "We weren't bitter, but it was difficult. It was a long relationship that we were really proud of and loved. Almost all of our [agency] income was from Target. It was a devastating blow."

Nowack said the agency does not release revenue numbers.

But PMH bounced back, first with small projects, including a global branding campaign for Mattel's iconic Barbie doll line, and then with some prominent new accounts that grew to include Gap, J.C. Penney, Kmart and the beauty product retailer Sephora. PMH also just landed baby boomer retailer Chico's as a client.

"They cut their teeth on Target," said John Purdy, an advertising professor at the University of St. Thomas who came out of the agency world. "They were justifiably proud of work that put Target on the map, in my judgment. They were given the latitude to define what Target was and distinguish it from Kmart and Wal-Mart. But change happens, and relationships just don't last that long in the advertising world."

PMH's last Target assignment was to promote the retailer's Missoni line of goods, a campaign so successful Target couldn't keep up with demand. A Target spokesperson last week said the Minneapolis-based retailer "values" the work PMH delivered but "after careful consideration, we elected to go in a new direction and currently work with a number of different agencies."

'Money can't buy style'

The first post-Target project for PMH was with the Athleta line from Gap. The agency then got a call from the apparel group at Kmart and signed on with that client in April 2011.

"We had a blast with that client," Nowack said, "but it was not the same media budget [as Target]."

PMH centered its Kmart work on the slogan "money can't buy style" and helped launch actress Sofia Vergara's popular line of clothing. PMH also did advertising for Kmart's Gordon Ramsay celebrity chef line of cookware.

Then came Sephora, followed by Gap, which began as a campaign for new markets outside the United States and eventually grew to include overall duties for the San Francisco-based retailer.

In October 2011, J.C. Penney contacted PMH with a strategy in which the Texas-based retailer would forgo blockbuster sales for consistent low prices in its stores.

The common perception had been that PMH got the J.C. Penney account because Target's former chief marketing officer, Michael Francis, became Penney's president in late 2011. But PMH was hired before that. Francis since has left the company.

"It was an enormous win for us" Nowak said, even though the concept has been slow to gain consumer acceptance.

Throughout its comeback, PMH refined its distinctive style blending humor, music, movement and bright colors in its advertising.

J.C. Penney ads featured such music oldies as "My Guy'' by Mary Wells and "Sunshine Lollipops and Rainbows'' by Lesley Gore. A Kmart ad featuring Vergara was set in a library where plain-looking librarians and patrons transformed into stunning beauties with the message "Never judge a book by its cover." One Gap promotion for T-shirts showed millennials with the wording "Be your own T." An ad for Penney's shows a dog repeatedly jumping through a hoop held high by an elementary-school-age girl with the tagline "no more loopholes."

Agency founder Dave Peterson said PMH wants to create "strong emotional" connections between the brands it represents and consumers.

"We want to make you love that brand and skip the intellectual work," Peterson said in an interview. "We use designers and music and leverage pop culture. At Target we learned so much."

Purdy said advertising in the retail sector is highly competitive.

"The retail business has always been tough, because it is so focused on immediacy," Purdy said. "There's always an urgency to build sales and less tolerance for long brand-building campaigns. There's an old saying that you build brands over time and you build sales overnight."

Peterson said good advertising accomplishes both.

"With retail, you really have to be responsive to what is happening in the marketplace. Trends change quickly," he said. "It's just a faster game. You have to be good, but you have to be quick."

PMH's client roster is not all retail and not all national in scope.

The firm has one Minnesota client now -- Children's Hospitals and Clinics -- a nonprofit health-care provider with campuses in Minneapolis and St. Paul. One ad shows a day in the life of Children's physicians and their clients with the ending, "We speak kid."

The agency also put together a music CD for Children's featuring family and kid-themed work by local musicians as a fundraising vehicle for the 88-year-old institution.

"This is a client that's close to the heart," said Nowack, noting that several PMH employees had children treated at Children's. "It's almost a labor of love."